Most debt problems do not go away and resolve on their own. They’re there when you go to bed at night, and they’re always there when you get up in the morning. They can cause many ulcers, sleepless nights, stress, and even physical illness.

As a bankruptcy lawyer for the past 22 years, I have seen the devastating effects of serious debt problems on people’s personal lives, their businesses, their families and their marriages. What I also saw is that a lot of these effects could have been avoided with good planning.

Since the start of the pandemic, many people have lost their income. They were unable to pay their mortgage or rent, and without the temporary forbearance authorized by their creditors, they could not have survived. But these were only temporary fixes. Sooner or later you will have to face your creditors and pay what you owe.

Dealing with serious debt problems often causes severe anxiety and fear of the future. What will happen to me and my family if I am sued by creditors? Can they seize my salary or freeze my bank accounts? Will I have enough to buy food, pay my rent or mortgage, and keep my head above water?

The worst thing you can do when you are in this situation is pretend everything is fine until one day your situation becomes a financial emergency. You’ve probably heard a lot of negative things about bankruptcy. Perhaps you have heard from others that you will never be able to buy anything on credit again. But what if I told you that on average, people who go bankrupt can rebuild their credit in as little as 3-4 years? That’s right. While it can be reported on your credit for 7-10 years, the effects of bankruptcy rarely last that long unless you allow it. File Bankruptcy is the beginning, it is not the end of the world.

After bankruptcy, there are positive steps you can take to rebuild your credit. Most people who file for bankruptcy have a tarnished credit rating anyway due to late payments, collection accounts, lawsuits, etc. on their credit report and as long as they are past due, creditors continue to report them to the credit bureaus month after month. Filing for bankruptcy stops reporting negative information. While payment history is 35% of your credit score, 30% is the total amount of debt you owe. If bankruptcy wipes out most, if not all of your debt, your debt-to-income ratio improves over time.

Filing for bankruptcy automatically stops all actions of creditors such as harassing phone calls, collection letters, lawsuits, wage garnishments, foreclosure and repossession. Generally, there are 2 types of bankruptcy for individuals. You can either write off debts you can no longer pay (Chapter 7) or consolidate all of your debts into one low monthly payment and pay your creditors only on the basis of what you can afford (Chapter 13). Which chapter is right for you will depend on your income, expenses, assets, and deposit goals, among others.

If the COVID pandemic has caused a loss of income that has made it difficult for you to keep track of all your bills, you are not alone. The first thing you need to do is protect yourself and your family before anything else. If bankruptcy has become necessary for you to survive financially during this difficult time, there is no shame in doing what you need to do to keep your family financially secure.

Bankruptcy relief can be your first step in rebuilding your finances, your credit, and your life. Remember that your past does not equal your future. You have the power to change your life by taking action now. If you haven’t read my book, “What You Need to Know Before You File for Bankruptcy,” you can download it for free at

For a free assessment of your case, please call our office toll free at 1-866-477-7772 to schedule a free consultation.

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NOTE: Due to virus lockdown, I currently offer phone or video consultations. Please call the office to schedule your meeting with me. Questions? Write to me at [email protected].

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None of the information in this document is intended to provide legal advice for a specific situation. Atty. Ray Bulaon has successfully helped over 5,000 clients get out of debt. For a free legal assessment of your situation, please call RJB Law Offices at Toll Free 1-866-477-7772.

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